Meta to Spend Tens of Billions of Dollars on AMD Gear, Buy Stock

Summary

Bloomberg Intelligence Podcast – Episode Summary

Episode: Meta to Spend Tens of Billions of Dollars on AMD Gear, Buy Stock
Date: February 24, 2026
Hosts: Paul Sweeney, Jennifer, Scarlet Fu (various contributors)
Featured Analysts/Guests: Ed Ludlow, Geetha Ranganathan, Michael Shaw, Drew Redding

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Episode Overview

This episode dives into several major stories in tech, media, pharma, and retail, including Meta's massive investment in AMD for AI infrastructure, the ongoing M&A drama with Warner Brothers Discovery and Netflix, Novo Nordisk’s price cuts on popular GLP-1 drugs, and Home Depot’s latest earnings performance.

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1. Meta’s Multi-Billion Dollar Deal with AMD

Main Discussion (02:08–05:56)

Key Points:

• Meta’s AI Ambitions:
  Meta (Facebook’s parent) has committed to buy AMD chips and computers tailored for AI workloads, starting H2 2026, as part of a multi-year, multi-billion dollar deal.
• Partnership Mechanics:
  AMD receives not just revenue but also warrants to buy 160 million AMD shares—a noteworthy financial structure.
• Industry Context:
  AMD is a “distant number two” behind Nvidia in data center chips, but this deal is a substantial boost.
• Scale and Power Needs:
  The commitment totals six gigawatts of data center capacity—comparable to six nuclear power plants and enough to supply millions of homes.
• Meta’s Overall Spending:
  CEO Mark Zuckerberg is committing $600 billion over five years, emphasizing the high-stakes nature of AI investment.

Notable Quotes:

• "Six gigawatts of capacity is equivalent to the output of six nuclear reactors. It's enough power for several million homes."
  — Paul Sweeney (02:41)
• "[Meta’s] committing to spending about $600 billion over the next five years or more...if they misspend, quote $200 billion here or there, the risk of not spending that money is greater for them."
  — Paul Sweeney paraphrasing Mark Zuckerberg (04:08)
• "You can't even compute it with the human brain. That's kind of what we're talking about."
  — Ed Ludlow, on AI’s power requirements (05:33)

Memorable Moments:

• Speculation on whether the warrants for AMD shares constitute “circular financing.”
• The explanation of why AI infrastructure deals are measured in gigawatts, underscoring the energy intensity and infrastructural challenges.
• Context on Nvidia partnership—Meta is diversifying, not choosing a single supplier.

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2. Media M&A: Warner Brothers Discovery, Netflix, Paramount Skydance

Main Discussion (08:56–13:21)

Key Points:

• Warner Brothers Discovery for Sale:
  Netflix’s offer for Warner Brothers Discovery has been accepted, but Paramount Skydance is still vying with a higher bid (> $31/share).
• Shareholder Attitudes:
  Netflix shareholders see the deal as a “nice to have,” not a necessity, mostly fearing overpayment and regulatory complications.
• Strategic Importance:
  For Paramount Skydance, the deal is “must have”—their streaming business is small, and growth prospects are otherwise bleak.
• Possible Alternatives:
  If Paramount loses, merging with Comcast NBC is a theoretical option but fraught with antitrust risk.

Notable Quotes:

• "At this point, I think majority of the investors really view it as a distraction, at least in the near term."
  — Geetha Ranganathan, on Netflix investors (10:40)
• "For Netflix, there is the added complexity of a long regulatory road...a lot of uncertainty at this time, Paul."
  — Geetha Ranganathan (11:00)
• "There is effectively no plan B for Paramount Skydance...organically, the growth prospects look extremely bleak."
  — Geetha Ranganathan (12:24)

Memorable Moments:

• Analysis of streaming market dynamics and the premium Netflix is willing to pay (25x EBITDA).
• Strategic urgency for Paramount markedly contrasted with Netflix’s cautious posture.

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3. Pharma Focus: Novo Nordisk's Price Cuts for Ozempic and Wegovy

Main Discussion (16:22–21:56)

Key Points:

• Price Reduction:
  Novo Nordisk plans to slash list prices for Wegovy and Ozempic in the US by 50% to about $675/month.
• Effects of Price Cuts:
  This will mainly benefit patients on high-deductible insurance and copay plans; actual net price impact will be less due to insurer negotiations.
• Competition and Patient Choice:
  Eli Lilly’s “Zepbound” remains preferred by doctors due to superior results, but cost and insurance accessibility drive actual patient choices.
• Future Market Dynamics:
  Oral formulations (vs. injectable) are set to grow in importance, improving access and potentially filling different market niches.
• Next Innovation Wave:
  The next breakthrough may come from “Amlan” (or similar), a GLP-1 alternative promising similar efficacy with better tolerability.

Notable Quotes:

• "50% on the list...bringing down the monthly cost down from 1350 to about 6, $75 per month."
  — Michael Shaw (16:44)
• "Doctors or the ones we've spoken to, you know, prefer Zepbound. In reality, it comes down to essentially cost and whatever the patient can access."
  — Michael Shaw (18:19)
• "As you know, one of the main drawbacks at the moment of GLP-1 therapy is the GI side effects...so Amlan aims to solve that problem."
  — Michael Shaw (20:33)

Memorable Moments:

• Clear explanation of the difference between “list price” and “net price.”
• Outlook for both injectable and oral obesity treatments in the US market.

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4. Retail: Home Depot’s Solid Earnings Amid Housing Uncertainty

Main Discussion (24:56–28:51)

Key Points:

• Earnings Recap:
  Home Depot posted a strong quarter, beating same-store sales expectations and maintaining FY guidance; stock up 2.9%.
• Market Context:
  Demand is steady despite weather impacts; long-term growth limited by housing market stagnation and consumer hesitancy.
• Housing Market Impact:
  Lower mortgage rates haven’t yet stimulated significant home buying activity; consumers are cautious, waiting for better deals and more confidence.
• Tariff Impact:
  Home Depot has absorbed most of its tariff-related cost increases (about 3%) through prices, with ongoing supply chain adjustments.
• Competitive Landscape:
  Lowe’s, reporting next, is expected to show relative strength among professional contractor customers, but faces similar headwinds.

Notable Quotes:

• "If you strip out all the weather impacts...they're really growing demand at about a 1% comp range. So their customer has been resilient."
  — Drew Redding (25:22)
• "There's just a lack of urgency among buyers...until we rebuild that confidence, lower rates aren't having much of an impact."
  — Drew Redding (26:11)
• "Home Depot sources about 50% to 60% of the products they sell from North America...they've done well to diversify their supply chain."
  — Drew Redding (27:26)

Memorable Moments:

• Discussion of consumer psychology in the housing market and its ripple effect on home improvement retailers.

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Timestamps for Important Segments

• Meta & AMD AI Deal: 02:08 – 05:56
• Media M&A: Warner, Netflix, Paramount: 08:56 – 13:21
• Pharma/Obesity Drugs – Novo & Eli Lilly: 16:22 – 21:56
• Home Depot Earnings/Industry Update: 24:56 – 28:51

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Notable, Attributable Quotes

• Meta/AMD Energy Use:
  “Six gigawatts of capacity is equivalent to the output of six nuclear reactors.” — Paul Sweeney (02:41)
  “You can't even compute it with the human brain.” — Ed Ludlow (05:33)
• Netflix M&A Anxiety:
  “At this point, I think majority of the investors really view it as a distraction, at least in the near term.” — Geetha Ranganathan (10:40)
• Pharma Innovation:
  “Amlan aims to solve that problem.” — Michael Shaw (20:33)
• Consumer Sentiment:
  “There's just a lack of urgency among buyers...they're taking more of a wait and see approach.” — Drew Redding (26:11)

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Episode Tone & Takeaways

The episode maintains Bloomberg’s analytical, data-driven tone. The hosts and guests mix concise reporting with deeper, thoughtful analysis, focusing on the practical impacts for investors and consumers alike. The episode is particularly rich in context about market forces, industry shifts, and the enormous scale and stakes of the current tech and pharma races.

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End of Summary

Transcript

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[Jennifer]

These are making a comeback, I think.

[Paul]

Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.

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[Bowen Yang]

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[Jennifer]

Bloomberg Audio Studios Podcasts radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple Car Play and Android Auto with the Bloomberg business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul]

Another big, big noise, I would say. News story coming out of the technology space. Metta will buy AMD chips and computers designed to run artificial intelligence models over a five year stretch beginning the second half of 2026. And this is a kicker for me and I receive warrants to buy 160 million AMD shares.

[Drew Redding]

Pretty cool.

[Paul]

Let's get the latest reporting there. Ed Ludlow, a BTech Co host. He's out there in San Francisco at another big deal Another two mega companies here doing some big business together. What do you make of it?

Yeah, I mean it's very large scale. Six gigawatts of capacity is equivalent to the output of six nuclear reactors. It's enough power for several million homes. The average size of a data center is about 300 to 500 megawatts. So it is a sort of multi year massive commitment. And you know, the market has faded a little bit in terms of AMD ship reaction. But it's quite a big bet by matter that the AMD's technology, in particular its AI accelerators, the chips that will be used to run models and what we call inference are effective. But the warrants. I agree, very interesting. Like is it or is it not circular financing? I'm always up to debate it.

[Jennifer]

And of course we know that Metta announced a tie up with Nvidia just last week. So this is about Metta also diversifying its partners in this build out. How much do we know or is can we guess that Metta is spending on this partnership, on this transaction?

[Paul]

Well, on this AMD one, the way that Lisa sue and AMD put it is that it's double digit billions per gigawatt. So it's tens of billions of dollars over the five years. Remember AMD is a distant number two player with respect to you know it's all of its revenues are about $10 billion a quarter which includes the datacenter part. Nvidia's just data center part is, is more than $50 billion. So you know they've got some ways to catch up. But yeah, it's very significant scale. And on the matter side. Right. You know Mark Zuckerberg said it next to the President, he's committing to spending about $600 billion over the next five years or more. And you know he's always said that like if they misspend, quote $200 billion here or there, the risk of not spending that money is greater for them. So the stock's like down half a percentage point right now. But yeah, you know, most people. This is consistent with what we'd expect

from matter at what I'm seeing as I, I'm coming up to speed and all things I and the lingo that's used in that industry when Metta agrees to buy AMD chips, computers. Okay, I get that. Where does the whole concept of measuring this in terms of gigawatts and power, how does that work into the story?

Oh, that's a really. No, that's a really smart question. Basically like data is transferred via electrons. There's work in more nascent fields of transferring data via photons. Light in other words. But inside the server, that's how data passes through electrons. There is a heavy electricity draw to power the whole system. Not just to run the GPUs and run the computations, but also like everything involved in cooling and heat dissipation. Like we're talking about electricity and that's why it's measured such and like to go back to Scarlet's earlier question, like this is 6 gigawatts just between Metta and AMD. But Matter has plans to install like tens of gigawatts by the end of this decade and then beyond that like hundreds of gigawatts, you know, completely different scale to what we've, we've been talking about. That's why we track so closely in parallel what is happening with grid and energy infrastructure. Because the burden is, you know, it's not, you can't even compute it with the human brain. That's kind of what we're talking about.

Stay with us. More from Bloomberg Intelligence coming up after this.

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[Bowen Yang]

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[Matt Rogers]

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[Jennifer]

Oh, could this vintage store be any cuter?

[Paul]

Right?

[Jennifer]

And the best part, they accept Discover.

[Bowen Yang]

Except Discover in a little place like this?

[Jennifer]

I don't think so, Jennifer.

Oh, yeah, huh? Discover is accepted where I like to shop.

[Geetha Ranganathan]

Come on, baby.

[Jennifer]

Get with the times.

[Bowen Yang]

Right. So we shouldn't get the parachute pants.

[Jennifer]

These are making a comeback, I think.

[Paul]

Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.

[Jennifer]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg business app Listen on Demand, wherever you get your podcasts or watch us live on YouTube.

[Paul]

One of the things we're keeping an eye on is this big M and a trade in the media space. Warner Brothers Discovery. What do we know? We know that it's for sale. We know that Netflix has an offer that's been accepted by Warner Brothers Discovery. That's a good news thing. But we also know that Paramount Skydance is very interesting and has made repeated bids for this company. And it's been reported most recently that Paramount's actually raised its bid a little bit, but I don't know where we are. It's been hanging on for such a long time here. Somebody is following this stuff very closely, and that's Geetha Ranganathan. She is the media analyst for Bloomberg Intelligence. She follows all of the media companies out there. Geetha. I guess Paramount's coming up with a higher offer. Do we have any details of what this new offer for Warner Brothers Discovery is?

[Jennifer]

Yeah.

[Geetha Ranganathan]

Thanks, Paul. So we don't have the dollar amount. We know that it's above $30 a share. That's the, that's the tender offer that they launched a few months ago for all of Warner Brothers Discovery. They had informally agreed to take the number up to $31 or above $31. But we still do not have clarity on the number that they have revised it to. And you know, we're still kind of, I think at least the Warner Brothers shareholders, Warner Brothers Discovery shareholders are still kind that best and final offer. So still, you know, a lot of details not really disclosed. We have to wait to hear back and see what the Warner Brothers Discovery board decides.

[Paul]

You know, I'm looking at Netflix's stock. It's down 17% this year. It's down 22% on the trailing 12 months. This is a stock that did nothing but go up for years and years. Do Netflix shareholders, how are they viewing this potential deal for Warner Brothers?

[Geetha Ranganathan]

Yeah, so, you know, at this point, I think majority of the investors really view it as a distraction, at least in the near term. I mean, we've seen this happen time and time again when, you know, winning and there's always this, this kind of cloud with M and A, you know, you just don't know whether the deal is actually, actually going to work. Execution risk is there. Integration risk is there. For Netflix, there is the added complexity of, you know, a long regulatory road. One doesn't really know how any of that scrutiny is going to play out on the reg side, on the antitrust side. So there's just a lot of uncertainty at this time, Paul. And you know, we do know that the, the underlying story, the underlying business economics for Netflix is working. I mean, they have subscriber growth, they have pricing power, they have a new lever in the form of advertising which is expected to take off in a big way this year. So all of the underlying drivers are in place. Does the Warner Brothers deal help? Absolutely. It is a nice to have, but it is not a must have. And I think what, what the Netflix shareholders have been really afraid of is Netflix overpaying for this asset. We know that at the current offer they're already paying 25 times EBITDA. Is Warner Brothers worth that? One can argue that, yes, it is. It does have some global great franchises. But going above and trying to match Paramount's offer, that could be a risky move. And I don't think shareholders would like that, Keith.

[Paul]

You know, in my view at least, and I've read across some Wall street research, this deal for Netflix, it's a nice to have, obviously it's great, great assets. But for Paramount, it's kind of a must have. What happens to Paramount Skydance if they don't get this Warner Brothers deal?

[Geetha Ranganathan]

Yep. Yeah, that's the big head scratcher, Paul. I mean, there is effectively no plan B for Paramount Skydance. You know, one of the things that has been kind of debated a lot is who can they combine with. Obviously, organically, the growth prospects look extremely bleak. They have about 60% exposure to a declining linear TV ecosystem. The studio business, while it's up and down. The streaming business, yeah, they've done okay. But again, it's still subscale with only about 80 million subscribers. So they absolutely need to have a dance partner. The question is, who do they combine with if they don't have Warner Brothers Discovery? Obviously one of the choices out there is Comcast NBC. We'll have to wait and watch because again, there could be potentially a lot of regulatory issues because you do have two broadcast networks with CBS as well as NBC. So I'm not sure how that works, but that is potentially an option that they can explore if the Warner Brothers deal doesn't work out.

[Paul]

Stay with us. More from Bloomberg Intelligence coming up after this.

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[Matt Rogers]

is Matt Rogers from Las Culturistas with Matt Rogers and Bowen Yang.

[Bowen Yang]

This is Bowen Yang from Las Culturistas with Matt Rogers and Bowen Yang. What if your WI fi was more than just WI fi? What if your WI fi made everything in your whole house just work together better?

[Matt Rogers]

Well, Xfinity WI Fi pretty much does exactly that. It's powered by Their best, most elite, high performing tech.

[Bowen Yang]

Allow us to paint a very realistic example. Everyone in your house, everyone is on their devices at the exact same time. Gaming, working, swiping. Right? Because of course they are. And the finale of your favorite show of all time of the week is on at the exact same moment. Well, you can boost the WI fi to your device with Xfinity.

[Matt Rogers]

And have you ever asked yourself, what if my WI fi could keep watch over my kids for me? Well, probably not, because that's a weird thing to ask yourself, but Xfinity WI Fi has parenting skills, even if you sometimes forget yours. Xfinity's like, don't worry, I'll monitor the WI Fi.

[Bowen Yang]

It's completely proactive, fixing issues before they even happen. Bottom Xfinity is smart and reliable. You deserve the peace of mind of having WI Fi that's got your back.

[Matt Rogers]

Xfinity.

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Imagine that.

[Jennifer]

Thy ticket lady Jennifer of Coolidge. Well, many thanks, good sir. Here is my Discover card. They accept Discover at Renaissance Fairs? Yeah, they do here. Discover is accepted at the places I love to shop. Get it with the Times.

[Bowen Yang]

With the Times.

[Jennifer]

You're playing the loot.

Yeah, and it sounds pretty good, right?

[Paul]

Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.

[Jennifer]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg business app Listen on demand, wherever you get your podcasts or watch us live on your YouTube.

[Paul]

Novo Nordisk plans to slash US list prices for its medicines Wegovy and Ozempic next year. We are a Wegovy household, so this is good news there. Michael Shaw, senior pharma biotech analyst for Bloomberg Intelligence, joins us from London. Mikey, what's Novo doing here? They going for market share? What's the plan here?

[Michael Shaw]

Yeah, I think that, I mean, the slashing of the list price would, I mean, would essentially improve access, I think, in terms of the price cut. So 50% on the list. So it's bringing down the monthly cost down from 1350 to about 6, $75 per month. I mean, you won't see that sort of discount translate to the net price. So I think it's important to kind of make that distinction between the list and the net. I mean, what it does mean is, you know, Novo will be essentially negotiating with insurers off a lower base, and then you'll probably see some adjustment in the discount or rebate offered. But I don't think that 50% is going to translate down to the net price. I think what's also important to note is, I mean it's going to benefit patients here with high deductibles insurance plans or patients that have co insurance plans where they're paying a percentage of the list price. But it doesn't affect kind of pricing in the, in the, in the direct patient channel or the, or the self pay prices which are obviously, you know, a key driver of sales and volume at the moment. So the floor here is effectively sent by, by Trump Rx where the drugs are available at about $350 per month.

[Jennifer]

How do patients decide whether they want the Eli Lilly pill versus the Novo pill? Is it just whatever their doctor prescribes them or people going out in and actively saying I want this one over that one?

[Michael Shaw]

Well, the Lily pill hasn't been injection at this point. Yeah, but I mean in terms of the injectable. So that Bound versus Wegovy, I think in general, you know, based on all the prescribers that we've spoken to and also based on the clinical data that's out there, Lilly's got the superior product. I think that was clear in head to head studies as a redefined 4 trial that read out a couple of days ago ago and you know, the base case there was for Novo's Wegovy to Show non inferiority vs Z. Bound didn't meet its primary endpoint. The weight loss actually looked inferior. There are a few caveats there. So in general, I think, you know, doctors or the ones we've spoken to, you know, prefer zepbound. In reality it comes down to essentially cost and whatever the patient can access either through what they can afford or their insurance plan.

[Paul]

Mikey, I know you guys since the beginning of all this have kind of scoped out the size of the market here and the numbers are just huge. What does the introduction of an oral dosage mean for maybe growing the number of patients that may be attracted here?

[Michael Shaw]

Yeah, so I mean we still see, you know, a place for orals and injectables. Orals obviously helps improve access. They're cheaper, they don't face the same fill and finish constraints of an injectable treatment. And then in terms of kind of positioning, whether they're going to use for weight loss induction or weight loss maintenance, I think that the jury's still out on that. Different people we've spoken to and different companies that we've spoken to have different views on the positioning of an oral versus an injectable. But I mean, I Think there's going to be room for both and both formulations are going to be utilized.

[Paul]

What's the next real, I guess big move here in this part of the market. I mean I think getting the oral dosage is big. What's the next big thing? Is it just improving it, maybe lowering the side effects? What are you looking for next?

[Michael Shaw]

Yes, I mean when we look at, we've done our analysis into the pipeline for a VC so I mean there's more than 190 assets in clinic. It's heavily dominated by, by GLP1. So there's going to be a need for new Mechanisms outside of GLP1. One of the key ones coming through the pipeline at the moment and is going to be in focus this year is going to be Amolin. So the idea here is to have, I mean it's a different, it's a non incredible mechanism, it's an injection, a weekly injection. But the idea here is to basically have GLP1 like weight loss but with better tolerability. So as you know, one of the main drawbacks at the moment of GLP1 therapy is the GI side effects of the gastrointestinal side effects, which leads to discontinuations. So Amlan aims to solve that problem. We don't need to see kind of more than 20% weight loss. So Amlin drugs are generally targeting 15 to 20% weight loss over a year. But we do want to see that improvement in tolerability if it can show improvements in body, body composition. So that's fat mass loss versus muscle mass loss, you know, that's going to be considered a bonus. So that's really going to be, you know, the next, the next focus or the next wave of innovation in obesity.

[Paul]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Odoo Announcer]

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[Matt Rogers]

This is Matt Rogers from Los Culturistas with Matt Rogers and Bowen Yang.

[Bowen Yang]

This is Bowen Yang from Los Culturistas with Matt Rogers and Bowen Yang. What if your WI fi was more than just WI fi? What if your WI fi made everything in your whole house better?

[Matt Rogers]

Well, Xfinity WI fi pretty much does exactly that. It's powered by their best, most elite, high performing tech.

[Bowen Yang]

Allow us to paint a very realistic example. Everyone in your house, everyone is on their devices at the exact same time. Gaming, working, swiping.

[Paul]

Right?

[Bowen Yang]

Because of course they are. And the finale of your favorite show of all time of the week is on at the exact same moment. Well, you can boost the WI fi to your device with Xfinity.

[Matt Rogers]

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Except Discover in a little place like this? I don't think so, Jennifer.

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Discover is accepted at 99% of places that take credit cards nationwide, based on the February 2025 Nielsen report.

[Jennifer]

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul]

Earnings still kind of have trickling in here. We had Home Depot reported some numbers today, some pretty good numbers, pretty good outlook. Stocks up about 2.9% today. It's up about 13% year to date. It's got a market cap of $386 billion. Let's check in with Drew Redding. He Covers all the home builders and all the related stocks there, including the Home Depots of the world. Drew, what'd you make from the earnings coming out of Home Depot?

[Drew Redding]

Yeah, it was a solid print for Home Depot. Be on same store sales with a little bit of weather impact. I think importantly, they maintained their four year guidance that they issued at their December analyst day calling for comp sales of 0 to 2%. You know, quite frankly, when you think about Home Depot, it's really been steady as she goes for several quarters. If you strip out all the weather impacts that we've seen over the last couple of years, they're really growing demand at about a 1% comp range. So their customer has been resilient. As you heard on the call though, the problem is there's just not really a catalyst for a significant next leg of growth. And a lot of that has to do with what we're seeing in the housing market.

[Jennifer]

Market, right. Affordability still remains a big issue, although mortgage rates have come down. So that should be a positive for Home Depot, no?

[Drew Redding]

Yeah, of course, lower mortgage rates we do expect will stimulate demand throughout the year. You know, it should also encourage more refinance and activity which could support bigger ticket spending. This year is. We just haven't seen it yet. If you look at existing home sales in December, they were below a 4 million annualized rate. That's about 25% below what kind of what a normalized market would look like. You know, one of the big issues that's out there, we heard it from Home Depot and we hear it from all of the builders that we talk to, is that there's just a lack of confidence at the moment. Whether it's the direction of the economy or the outlook for employment. There's just a lack of urgency among buyers. And if you think about it, there's a lot of people sitting on the fence looking at the headlines saying to themselves, look, maybe home prices are are going to come down, maybe mortgage rates are going to come down further. So they're taking more of a wait and see approach. So I think until, you know, we could kind of rebuild that confidence, you know, lower rates aren't having much of an impact.

[Paul]

Drew, just the last several days, the tariffs story and narrative has kind of reared its ugly head again. Just refresh our memory out of the home, you know, the Home Depots of the world, how they dealt with tariffs over the last year or so.

[Drew Redding]

Sure. So for some context, Home depot sources about 50% to 60% of the products they sell from North America. So those aren't subject to tariffs. The remaining portion comes from a number of countries. They've done well to diversify their supply chain. What they told us today is that they've pretty much implemented all of the pricing in terms of tariffs that they're going to do. It's about a 3% increase. We've seen it in average ticket this quarter and they expect that to drive average ticket in 2026. As it relates to the comments we heard Friday and over the weekend, as you would expect, given it's happening in real time in a fluid situation, they said they're still analyzing the impact and

[Jennifer]

very quickly, Drew, before we let you go, Home Depot small arrival Lowe's will be reporting earnings tomorrow morning. Are we expecting a similar story from Lowe's?

[Drew Redding]

Yeah, I would expect to hear from Lowe's the strength of their professional customer. They've done well to invest in a space where they've kind of ignored for, you know, a couple of years. That's really driven out performance of Home Depot. So we expect to hear relative strength there. A little pickup from weather. But big picture, I do expect to continue to hear that big ticket discretionary spending remains challenged by those same things that we discussed, whether it's related to housing or overall sentiment from the consumer.

[Jennifer]

This is the Bloomberg Intelligence podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

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